Tuesday, November 19, 2013

Greetings Thrifty Friends,

Many credit cards offer rewards on purchases, and it is tempting to use them just to rack up points. I am reminded of a story from a year or two ago where credit card holders were buying dollar coins from the U.S. mint by the pound, earning all sorts of free air miles from the purchases, and then depositing the coins in their bank accounts in order to pay off the credit cards. A convenient little scam.

But for the less conniving of us, chasing points or miles can be addictive and dangerous.

Keep pinchin' those pennies,
Penny

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TODAY'S THRIFTY TIP:

Credit card rewards can cause some people to buy things they don't need simply to get the rewards. The key to the rewards card is to use it to purchase things that you already need, but don't use a rewards card just for the points. In order to receive a $500 plane ticket, you would need to charge several times that amount to earn the equivalent in miles or points.

Studies show that consumers spend more when paying with credit versus cash, and rewards card users spend even more than those with a regular card.